why do you think the rbnz will go today?se the question is if they feel that there is a necessity potentially could do more, should they just do it today? sharon: that is what it boils down to. we can see that overs and wonders in the data. there is no one smoking gun. monetary policy is clearly working and that is what most people expect a hold. but if you look at what the reserve bank said in november, they showed a forecast, 19 basis points of tightening, practically a full hike. so our take was that they need to give us a nudge, rather than a big shove. unemployment did not rise as much as they thought. inflation didn't fall as nearly as nearly as much as they expected, migration is a bit stronger. so overall picture is still things are going there way, just to fish slowly. they also -- the overall picture is that still, things are going their way, just not too slowly. sort of the story of the wheels slipping a little bit on the risk of inflation staying too high for too long. so you can run with it a while and hope for

this is bloomberg. >> still ahead we will preview the rbnz decision. they ca longer risk of the country slipping into recession. here why the cio thinks the u.s. stock rally won't last long. this is bloomberg. ♪ >> u.s. stocks coming off the best today rally since april of 2020, the second straight day that we actually saw 95% of the s&p 500 members gaining ground. this perceived peak hawkish in us really boosting investor appetite. our next guest is not sure the u.s. stock rally will last long. let's bring in senior partner at asset management. it seems to me that it's not just you. cutting the year end price target to 3500, what are your reasons? >> to add on to some of the comments, a lot of it i see is not just rate hikes, but a supply of the amount of debt that's out there. in particular with u.s. markets, there's is an extra trillion worth of debt because of government spending over the next year. another for quantitative tightening. and so that means there are a lot more bonds for sale. and so it's just because of this massive flood of debt and

tracy withers joining us on the rbnz. you can turn to bloomberg for more on that meeting, go to tliv

haidi: we are watching the rbnz decision.mes to retail sales, stripping out inflation quarter on quarter, coming in at a contraction of 1.4%. that is worse than expectations. it extends the contraction of 6/10 of a percent that we saw in the previous quarter. a fall in retail sales mirroring the concerns about recession risks for the new zealand economy. the budget update did give a bigger than expected spending boost for the economy, there are expectations that the influx of immigration will be and inflationary force. hence the expectations the rbnz is not finished, expectations are for 25 basis points, even 50 basis points. we are seeing a depression when it comes to the consumer side of the economy. more ahead here on daybreak. this is bloomberg. ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. shery: a quick check of business flash headlines. alibaba is a cloud

we saw the move after the rbnz 50 basis point hike.cutive one after the previous meeting in the first time to have done that back to back since the start of the ocr back in 1989. key reebonz are settling. the australian 10-year yield falling in-basis point in the overnight session. we are watching whether we will see the continued rally when it comes to the aussie. over the next hour, we will get more on the rbnz and new zealand's economy. our interview with the rbnz governor, adrian orr. this is bloomberg. ♪

the rbnz is doing its best to see through the fog.nce in new zealand's banking system. and they have strong tier one capital buffers in australia as well. you can understand his areidence that loan losses expected. the buffers should help absorb all of that. they can keep supplying to the economy. but these smaller ones, they could the less able to withstand any shocks. -- be less able to withstand any shocks. housing prices are likely to fall in new zealand. he's -- he suspects sustained impact on the economy and said some of them will fail. plenty of unknowns heading into the future of the rbnz. we will be hearing more in just a little while. shery: new zealand has been quite successful when it has come to stopping the spread of the virus. what are we seeing in terms of the government's plan for the economic path forward? paul: it is an interesting situation. the deputy prime minister who is not part of the majority party -- he is a minor coalition party -- without him they would not be able to govern -- he has broken ranks with the

on rbnz calibrates meaningful arrivals until 2022.degree that our view is right and we achieve herd immunity in new zealand through the course of the next year, borders open up, pressure for the rbnz to do negative rates should ease. that should be a kiwi dollar positive dynamic at the same time the rba is turning more dovish. that is where the balance of risks lie at the moment. haidi: always appreciate your time. andrew boak there. westpac says it is paying a acord $1.3 billion to settle money-laundering case. we get the details next. this is bloomberg. ♪ haidi: we have breaking news from that white house press conference. white house economic advisor larry kudlow saying he doesn't think there is a need for another broad stimulus package, that there will be targeted measures only, that they need to be smart about those measures. this coming on a day where we had a parade of federal reserve officials stressing more fiscal stimulus is critical. chair powell calling fiscal stimulus unequal by anything else. larry kudlow saying they wou

the bok and rbnz hiking rates as well.week we have a jobs report out of the u.s., pmi numbers out of china, europe as well, and the opec-plus meeting that will be front and center after the fpr release. everyone is looking at their crystal ball for 2022. it is interesting what they think in terms of china. given what we have seen in the lack of performance this year, next year could be different and quite positive when it comes to socgen, if the msci could lead in their forecast for next year. they are talking about above 10% when it comes to growth for msci china. compare that to the nikkei, out beating even europe, japan, and the s&p, which is at the bottom of that chart. potentially we could see these darling trades start reversing. paul: south korea and the u.s. vying for your hearts and wallets through pop-culture. we explain what soft power is all about. >> south korea is having a moment. between the netflix show squid game, the boy band bts and the oscar-winning film parasite, its culture suddenly seems to be everyw

the rbnz is excited to hold the qe limit. government of lebanon has resigned after last week's devastating explosion in beirut. the cabinet quit amid rising public anger for the blast which is now responsible for at least 200 deaths and destruction of a large part of the city. the prime minister says it is the biggest disaster in recent lebanese history and blames corrupt political elites for sabotaging his administration. powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: president trump has resumed his press briefing after a possible security incident at the white house. happening right now, president trump speaking about the economy and other pressing issues. joining us now for the latest is bloomberg's government reporter jimmy wilkins -- emily wilkins. the only thing we heard is the shooting happened outside the white house, it is now under control. what else do we know at this point? emily: at this point, we are learning about things as they come

our next interview is coming up, the rbnz governor joins us at 9:30 a.m. in sydney.on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u.s. retail names next. this is bloomberg. ♪ shery: retailers have been among the hardest hit by the plandemic. -- the pandemic. we now have the latest round of earnings. let me get started with walmart. they beat expectations but they withdrew guidance for 2021. how well-positioned are they? allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. but omar tidwell. they increased same-store sales -- but walmart did well. they increased same-store sales. they are providing people what they need. haidi: in terms of forward guidance, do we have any expectation what they think the next recovery could look like? >> it is not clear. they are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what wa

the rbnz might hold off. wait for that to become entrenched.er key indicator being the labor market. unemployment is down to 4.7% in the first quarter. rv, one of the big four banks, sees that next year. -- rbnz, one of the big four banks, sees that next year. it is triple the pace they were expecting. rbnz already pulled back on qe, well off their piece of 1.25 billion a year ago and some analysts see purchases ending next month. >> what are the risks that could complicate things for the rbnz? paul: borders remain closed and the vaccination rate in new zealand is even worse than it is in australia and into the bloomberg vaccination tracker index so that is saying something. one area where new zealand also outstrips australia is the housing markets, the property market in new zealand even hotter than australia so that would add novation to the rbnz to book its early tightening. central banks got a close eye on the currency as well, wary of being one of the first major central banks to put some upward pressure on the new zealand dollar and creat

you want to take a look at some of these rbnz related trades. seeing that trading pair now coming near fair value. they are not confident that the rbnz will be able to meet the more dovish pricing we are seeing across markets. chicago nikkei futures are looking upside one quarter of 1%. annabelle: yes. you said it was that story in the u.s. session. we did have that late they rebound in the u.s. benchmarks or get s&p 500 closing back above that 5200 mark. treasury yields climbed in the session. 10 year yields dropping back from the highest levels of the year so far. oil. we saw it dropping somewhat this morning, fairly steady here. more on the geopolitical angle of what we are tracking here. gold hit a fresh record high again intraday in the session. interesting to note, given there's not such a clear catalyst for gold in this sort of inflationary environment. certainly the focus is very much on valuations at this point in time. we are getting priced to perfection. anything less than that that we get in the ego data, any sort of political noise

and the head of the rbnz said later it was a communication challenge. how could they turn on a dime so quickly? so they didn't. then -- and we spoke to him two days later and asked him about well, what about october? what about a rate hike then? he said they'll watch inflation. and continued to rise. jobs, they remain strong. and he said in terms of a rate hike, it's definitely a live meeting. >> a live meeting. we retain the right but not the obligation to move policy when we think it's necessary. >> now, today, even though third quarter g.d.p. is expected to track the rbnz said is to go ahead to make the rate hike because they expect a rebound after that. the latest covid developments are seen ruling out a 50 basis point rate hike which they are yesterday to do in august. and again, yes, in our bloomberg eke owe team says they will hold and signal a november hike. so there's a little more drama around this move than we might have thought. it -- thanks in part to bloomberg economics. shery: we'll find out in a few hours' time. our global and economics

what are the and plug-ins for the rbnz here?aled it was done, it came as a surprise to a lot of people at the last meeting. they are content to let the lacking impact of the 525 basis points of tightening we have seen layout. there could be more to come because of mortgage holders not going to roll over. other issues at play here as well. we have an election year in new zealand this year. there will be political dimension to this. it is the economy stupid. it expects political mileage to made out of this. this recession has, earlier than the reserve bank predict appeared the anticipated one in the second and third quarter. it has come in the first quarter instead. the next meeting is on july 12, and a week after that we get inflation numbers. next month we will get a better sense of what the rbnz does next. or it could be nothing. shery: confirming that recession for new zealand, and of course a great deal of uncertainty when it comes to those expectations, but also the implications of the rbnz. we are watching, the reaction whe

we will get a right decision from the rbnz -- a right decision from the rbnz. we are seeing a little bit of weakness in the early going off by about a 10th of 1%. at the head of the aussie open we are expecting a softer open of the asx as well. not a lot of movement in the aussie dollar. the rba pulsates rate hike -- caused its rate hike cycle. we may see one more hike from the rba in may. take a look at the y 13169 against the greenback. shery: let's get a little bit more on the latest economic news in the united states. let's bring in our global editor kathleen hays. kathleen, let me start with you. what is the specific data telling us? >> this is a job survey and labor survey. there is loosening up, but it is still tight. fed officials are focused on the type part. job openings fell to 9.9 million. but look how high they remain. before the pandemic, they were averaging around 7000 or 8000. then they spike up because there were so many job openings than people who wanted to go back to work after the pandemic. still pretty high. the vacancy to unemployment rat

the rbnz has set on two bands of tightening that several economists polled by bloomberg do not expect cash rate will go beyond 2% this cycle. the prediction is for the rbnz to hike key rates to 2% by early 2023 but a rate strategists said there are risks in either direction to that outlook. there could be pressure to hike as mortars reopen in new zealand. over at citigroup, they're noting that rbnz when it comes to inflation, they put up their timeline for the hike at 2% by the first quarter of 2024. haidi: those numbers will come out from new zealand in the next five minutes or so. the st. louis fed president said it is time to end emergency measures to support the economy. he spoke exclusively with bloomberg's michael mckee. >> i think it's clear that some of the inflation will be temporary. how much feeds into a more persistent process is really the question that the committee has to wrestle with going forward. i think we are already above our target on core pc inflation. according to the summary of economic projections katie is -- the committee is predicting 3%, excluding food and

what is the rbnz expected to do?g ie are looking out for doubling down on the amount of bonds they have been buying. they started that in march. they are seen taking that number two $50 billion new zealand. and remember in the emergency march meeting, they cut their points. by 75 basis it was a surprising move, aggressive. it was always a question of the rbnz signaling they are ready to do something like that, negative rates, or more than that if needed. they are looking at a gdp in the second quarter that is expected to drop up to 22%. it was not that strong but 1.8% growth, unemployment could get to 10%. coming,e is a budget the finance minister speaking in a couple of days to give more stimulus because the economy is in need of it and that will mean more bonds. that is one more reason why the rbnz would be ready to buy more bonds. they want to keep yields from rising especially when other countries are issuing bonds, you got to do something to make sure high.ields don't get too as for negative rates, adrian, the h

in just 24 hours, we will speak to the rbnz governor. to catch that conversation on thursday at 9:30 a.m. this is bloomberg. ♪ shery: time for morning calls. australian equities are becoming a preferred destination for wall street strategists as growth slows around the world. strategists from the likes of goldman sachs and morgan stanley and citigroup have upgraded australian or touted them among top picks. the australian benchmark has outperformed by 10% this year. we'll be watching the market opens in one hour's time. investors looking from shelter-- for shelter. they are buying into cash cows, etf assets. they have ballooned to $5.6 billion on inflows every week so far this year. the top holdings include multiple energy mains, haidi. haidi: let's get a quick check. of glencore has admitted to a decade of market manipulation. the u.s. regulators say the offenses took place from 2007 through to 2018. glencore agreed to plead guilty to charges including burglary, corruption and price me feel asian. -- the first quarter revenues -- barely

in july, in may, the rbnz thought at 5.5%. and mind you, that's still above where the federal reserve is, that this would probably be enough. and of course, there's two sides of the coin since then. you can see that that chart showing where the rba nz now and again the idea they're going to hold and we there have been signs of weakness in the economy. you know, manufacturing down for the fifth month in a row and more. this is the kind of thing that bolsters this case. house prices are down et cetera. on the other hand, inflation, if you look at that, is only down to about 6% on a yearly rate. so the target is 1 to 3%. so that is looking kind of sticky in the latest survey from the rbnz, cpi is supposed to get down to 5.3 by the end of this year and even down to 2.83 by the end of 2024. but it's inflation expectations at 2.70%. maybe that is a good sign. and that's what they're watching very closely because we have seen an uptick recently in inflation expectations themselves, not just the survey, which suggests that that is sti

later on daybreak asia, we speak to the rbnz governor adrian or. let's get to annabelle for the markets in asia. annabelle: we are focusing at what we are seen in the kiwi bond space. yields move in a little bit higher following the decision yesterday. the rbnz indicating inflation could take a little higher. one more rate hike may be needed. the question revolving around how long do rates need to stay elevated. the key rate in new zealand could be at 5.5% until 2025. in the equity space, futures will open in the red. kiwi stocks online to the downside. we have been watching the moves in the japanese yen. we are above the level the dollar again crossed in september when intervention first started. while above that at this point. the question is whether intervention risk is on the horizon. anything that will lead to meaningful appreciation of the japanese yen will need to be an exit away from the negative rates. we have seen a lot of currencies depreciate amid the dollar strength over the course of this month so perhaps the boj are unlikely to act j

the governor are the -- of the rbnz says we have a bit part in this. government is taking steps to deal with the hot housing market. m optimistic report definitely a lot of caution. a lot of governments realize if -- inflation isÁsurging. what h}h$}h$appens when we get r away from the pandemic? å&shery: kathleen hays with everything to watch across asian central banks. imim promises must be matched with real auction. we will have more from the cop26 climate summit in moscow. -- glascow. >> to cut down methane gas emissions. this is the second largest contributor to climate change. countries that agree and sign onto the pledge will promise to cut down methane gas emissions from 2020 levels come 2030. as usual, the devil is in the details. we see countries like russia, india, china, they have not signed onto this proposal. this is where the heads of state and political figures go home and it's time for the negotiators to do all the work behind the scenes. to see whether or not this will yield real results by the end of next week. this is now about the te

kiwi stocks a bit on the back foot after that rbnz decision yesterday.nnabelle: and as you said, it is this waiting game we have for the key u.s. inflation print coming up in about 24 hours. here is the picture for u.s. futures as they come online. a bit of weakness creeping in, similar to what we had in the intraday session. traders are reading that key u.s. inflation print. ahead of that we had the revision downward to u.s. gdp at the end of last year, but that data is kind of seen as pretty much uneventful by a lot of investors in the market. still, this core pce reading could highlight the very bumpy path that the fed faces to achieving its 2% target. what else are we tracking the session? you can see bitcoin, we have been tracking it over the course of this week, past the $60,000 mark. earlier it touched $64,000 in the u.s. session. it is that supply-demand dynamic. . more demand, investors parlayed into the spot bitcoin etf's. so that is the trading set up in this session today. but it is really that focus on the fed that we are also tracking this

rbnz already said if things it has done enough in that battle.dd we are also watching when it comes to any reaction from the aussie dollar given we are looking at a decidedly risk off mood at this point in time, kathleen. kathleen: the ecb governing councilmember mario santana says core inflation is coming down faster that it went up and is confident prices have peaked. he spoke to bloomberg's caroline connan a-day simran wants economic conference. mario: we have to keep an eye on all items of inflation and poor inflation stands out as -- core inflation stands out as a very important educator as well. you are right. it is not coming down as fast as headline inflation. but, we also need to remember that in the way you have it, it places the same trajectory. so, we need to remain confident about our way to -- the way we are fighting inflation. caroline: you remain confident you may have reached the peak? mario: all indicators say so. for this to happen we need to keep monetary policy very clear. we have increased interest rates for 400 basis points

this of course as we continue to watch the rbnz.r are coming on the show and talking about their decision to keep wrench marks on hold but also bringing forecasts for higher interest rates. sydney futures at the moment looking higher. this on the back of the longest losing streak since october. nikkei futures unchanged. we saw a slight gain on the s&p 500 in the new york session. coming up in the next hour, we speak to emily wise of state street for her market strategy plus bloomberg equality, focusing on the future of women in afghanistan. we will be speaking with an associate professor. this is bloomberg. ♪ haidi: very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's major market opens. shery: i am shery ahn in new york. welcome to "daybreak asia." a choppy wall street session. the virus and taper talk way on the economic outlook. commodities feel the pain of china's credit tightening. copper heading for its worst week in two months. adrian orr tells

new zealand bond yields rising as well ahead of a cash rate decision from the rbnz.ek, we are expecting to see the rate raise to 1.2 5% from 1%. we have plenty more to come on daybreak. stay with us. this is bloomberg. ♪ shery: here is a quick check of the latest business flash headlines. india's company has received environmental clearance for an $8.6 billion plan -- facing protests. activists are citing concerns over pollution and the diversion of land away from agriculture. gsw -- jsw says it set aside funds for environmental protection. a coffee company completed the restructuring of its financial debt, emerging from chapter 15 bankruptcy proceedings. that means it is no longer subject to insolvency proceedings in any jurisdiction. the ceo says he is confident the luckin coffee will have growth. rising labor costs weighed on profits in the fourth quarter. net income rose 7.4% to 1.2 billion dollars, missing average analyst estimates. a talent crunch is making it harder for i.t. companies like tcs to attract workers, increasing costs and weighing on margins. paul:

were you trying to make sure the markets were on the same page as the rbnz?e are always doing our very best to provide some guidance, some forward-looking markers for the public to be able to see, including financial markets, around how we see the economy unfolding, and hence, conditional on all of that, what we may need to do regarding monetary policy. so, yes, we have become confident around a central projection, and that projection is one where we see inflation pressures finally, i would say, normalizing, and one where we hopefully can be normalizing the level of interest rates back to a more neutral level. there is a long time between now and the middle of next year, as we have seen, but that is our best foot forward at this point. kathleen: is the virus or vaccines, new zealand's success at fighting the pandemic, is this the main thing that is opening the door to saying, maybe we could be hiking rates again? it is an optimistic -- if an optimistic scenario comes true? adrian: without a doubt, covid-19 helps implications -- they are the number one drivers

haidi: how strong is the pressure for the rbnz to cut sooner? diana: i don't think there is pressure on them now because when you look at the broad-based economic figures, i don't think anything is really signaling they need to cut right now. inflation is still too high year in australia. -- here in australia but i think that by the time we get to the middle of the year things will look quite different because the labor market will weaken and labor market strength was one reason why china's economy held up a lot better last year. despite the fact interest rates went up and inflation was higher consumers were able to offset the weakness in purchasing power with a strong earnings growth from being employed and i think that will change. we see unemployment rising to 4.5% i the middle of the year. it is 3.9%. and the consumer picture will look a lot weaker in a few months. but as we stand now, there is not any pressure on the rba to cut interest rates. haidi: it's a big political year both with conflicts ongoing and elections, indonesia heading to t

also watching kiwi assets in the wake of the rbnz hold this week.tting further numbers after the disappointing pmi reading. still signs of some inflationary uptake. the month-on-month food prices for june jumping 1.6% from a prior zero point 3%. also seeing a retail card spending seeing a gain of 1%, reversing may's contraction of almost 2%. still signs of resilience that comes to the food inflation as well as credit card spending in new zealand. coming up next,, we are getting more signs of china's crackdown on big tech coming to an end. we will get more details on premier li qiang meeting with tech firms and his vow to support them. ♪ this is bloomberg. ♪ kathleen: chinese tech stocks rally, more signals that beijing is ending its year-long industry crackdown. premier li keqiang met with tech executives on wednesday and the national government and reform commission approved the companies for supporting china's tech and novation. for more, let's begin our chief north asia correspondent stephen engle in hong kong. what was the premiet's key message?

we will be speaking with the rbnz governor adrian orr to talk about what is coming next for the rbnzfter that hawkish hold yesterday. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management. haidi: another story we are following, shares of live nation entertainment falling. bloomberg revealing a justice department move seeking a breakup over the business over antitrust violations. the case is related to ticketmaster's unrivaled control of concert ticket sales. the 2010 merger of live nation as well as ticketmaster has been the subject of several antitrust investigations

shery: for now, the rbnz prudence is actually making a lot of analysts and economists reassess how theyabout what other central banks could potentially do. kathleen: we have an mliv blogger who said he thought this could send other central banks in the wrong direction. it could prove to be a rash move. more of the talk is that, yes, as adrian orr said, what has happened in new zealand just shows how unpredictable and damaging the virus can be. the question that is more interesting is does this mean something for the bank of korea? they are expected to hike their key rate this year. the market has always priced in -- priced out the odds of two rate hikes down to one and is interesting because rate moves in korea and new zealand often go in tandem. they are smaller economies, smaller countries, and we have seen them right now, both looking at the overheating housing market, rising inflation. is that another reason they could be moving in tandem? some are saying they will not hike at all. others saying that maybe they will hike but they will signal that this is a dovish hike on like the ha

how much is this when it comes to domestic inflation pressures really weighing on the rbnz. what the government does fiscally. sharon: there is consumer price inflation every year -- everywhere, but new zealand is a big food exporter. we love it when our terms of trade go up above but it does all add to the inflationary picture. the inflation is all important. the tight labor market for example, like many places, they have expectations rising sharply. it is pretty clear this is not the sort of inflation that is going to go away. shery: explain the rationale here when he is trying to get to the path of least regrets that they talked about in february. sharon: up until very recently, the biggest regret was seen as causing a rise in unemployment in the very near term. but now with inflation where it is and expectations so much higher, pricing going up, the biggest regret would be losing inflation targeting credibility. it is a bit of a 180. it is not that simple. normally we turned down growth risks and consumer confidence is on the floor, for example. they would normally argue

the expectation was that would be it for the rv and see -- rbnz . keeping on hold this week as economic concerns continue to pile up new zealand. that 10-year note heading for numbers not seen since 2011. still to come, beijing condemns the u.s. for allowing stopovers by taiwan's vice president. more on that later this hour. first, here why cairo advisers say investors are putting too much faith in the recent stock rally, focusing too much on big tech earnings. we will talk market strategy next. this is bloomberg. paul: let's look at the week ahead with china sliding into deflation. we will get a day lose of data. lies industrial production, retail sales, fixed asset investment, and it jobless due tuesday. the pboc said its benchmark for a one-year lending rate with most economists expecting no change. on the inflation front watching cpi numbers from india this -- expected to show a sustained increase in food inflation and in the u.k. price pressures remain stubborn and we get inflation data from japan friday. wednesday the fed minutes will give us

we have the rbnz physician in a moment here -- decision in a moment here. they could possibly leave the door open to a further hike. the move in treasuries, the japanese yen, if you change on now to hit the 150 level against the greenback. this is typically when we watch for a sign of intervention from officials. you saw the sharp move higher in the dollar against the japanese currency. what drove that was the japanese government intervention. could there be something else aptly? we will be discussing the chance. perhaps to do with options positioning. shery: selling the dollar at the 150 level could be one of the reasons but we are also thinking intervention chatter is growing. let's get more with our . isabel -- with our across asset reporter, isabel. they have warned against these currency fluctuations. why is that 150 level so important? >> it really is just a psychological level. around this time last year, the japanese government first intervened, the first time in 24 years. this is a level a lot of analysts are watching. this could just be a standing

what are we hearing from the rbnz and do we know what data was put at risk?not been released, the nature of the information that might have been accessed is still being determined. there was a third party filesharing service illegally accessed, it the bank is not saying when it happened, what systems were accessed or how it took place. the government said it was a malicious attack. the rbnz does a lot of confidential information obviously, it is running a 93 billion-dollar kiwi program as well. program as well. it is working closely with domestic and international cybersecurity experts as well. this comes a few months after the new zealand stock exchange got targeted in a series of cyberattacks as well. denial of service outages on that i cash -- that occasion. who is responsible for that is still unknown. we will wait to see if we get more information on this attack. shery: what about the people who carried out the attacks? do we know anything at this point? paul: that has not been released either. there are two investigations into the denial of service outa

yield about that 5% mark yesterday for the first time since 2011 and we had the interview with the rbnz governors saying recession is the bare minimum what is needed to quell inflation. that is standing out, even though we are seeing muted moves throughout the session and investor angst and the vix as we touched the 18 mark for the first time in seven sessions but 30 is usually the level indicated with heightened volatility. vix features coming on by now. we are looking towards that range-bound start tilted towards a downside with the aussie contract and the level just below 146, but china and focused throughout the session. we have steve to talk about the moves to intervene in the chinese yuan but in terms of the moves in stocks it has been that record streak of nuts selling by foreign investors so even though we sold volatility yesterday, international investors are leaving the market now hitting that level. paul: bloomberg has learned the chinese authorities told state on banks to escalate intervention in the currency market this week and push to prevent a surge in yuan volatility as

. , and of course what is going on at rbnz.ne of the things that we will from jay powell tomorrow, is the economic outlook. what is your assessment of the global economy? would it support growth in new zealand, or is it more to the downside. >> we have been optimistic at, i should say. growth remains strong, despite all the headlines around trade wars, but they would have to become real and very vicious, because it can affect new zealand significantly. a lot of our products are either directly consumed or going into construction, that we export particular lead to the asian region, so we would have to see incomes fall quite significantly before trade was impacted. about,is thing to think and we are well supported by the moment by a strong exchange rate and terms of trade. : what are you most concern right now in terms of new zealand's economic outlook? adrian: the biggest challenges getting wages to rise. we have been below the midpoint of the inflation target for a couple of years now. to 3% for ann 1% them, and we have been at

it has been at the forefront of tightening measures from the rbnz.e some of the crux to the economic performance. >> a bit of a mixed sure right now. kiwi stocks now gaining three tens of 1% after the rbnz rate hike. that's why we are seeing the pressure on the kiwi dollar right now. we have had such a series of rate hikes recently that it seems 50 basis points is it cutting it anymore. the unemployment rate fell again to the lowest level in 50 years. the huge jump in new positions. when it comes to nikkei futures gaining a little bit, we have weakness of the japanese yen. if you don't go along with all of this huge tightening we are seeing around the world then you're going to get punished. that's what we're are saying with the japanese yen. we continue to see support for equity markets in japan. not a lot of change when it comes to u.s. futures at the moment. perhaps some upside given that we did fall in the new york session. we pared back some of those losses that at one point exceeded 2% because we got fed officials commenting that 100 basis poin

it doesn't expect the rbnz to approve that.mp also saying an interim dividend will not be paid for the first half. amp was one of the institutions that came under most racism during the royal commission conduct in the finance and banking industry. amp saying its sale of amp unlikely to proceed. see what happens with share price when it begins trading. in's begin -- let's check with first word news. su: a new survey says the threat of recession in the uk's at the highest in more than a decade. -- in the u.k. is more at a decade -- more than a decade. a chance of dramatic slump greater now than since before the financial crisis. also there is weakening sterling, current account deficit and poor economic growth . the u.k. banking industry is seeing more job losses. societe generale has started cutting in london with sources saying 30 people have been dropped in commodities. the is to restructure investment arm to preserve its leading status in equity derivatives. the bank announced lands to cut cut positions -- plans to 1600 posit

along with the rbnz, we get the sense that the bulk of the heavy lifting of these big moves might be they have to keep up with the likes of the fed. >> that's right. the rba does want to go slow and i don't think anybody is doubting that intention. the question is whether they can really go slow in a world where the fed is going so fast. also the australian dollar is weakening with the u.s. dollar so high. if you go slow, you risk collapsing your currency. it's going to be a very tricky meeting and also a tricky communication challenge. >> the official monthly indicator slowing down a little bit this week, what does that tell us about where the rba stands as opposed to the rest of the world which seems to be remaining quite hawkish? >> even from the start of australian inflation, compared to u.s. and u.k. has not been that high. we have not had the wage breakout elsewhere in the world. i think the biggest concern that the bank has is the household debt. australian households are some of the most indebted in the world. with interest rates going up, their repayments are going up and ho

having to do with what we get before the rbnz meets before next week. that recessionary risk being played out in that we have seen the yield curve inversion across new zealand sovereign bonds. the three year rising seven basis points. more to come here on daybreak. this is bloomberg. ♪ >> johnson & johnson will change the way it produces baby powder making all of its products based on cornstarch. this comes amid legal action against its baby powder with some consumers claiming it makes them sick. mitsubishi has established its own direct lending business that makes it the latest bank to try to take a share of the lucrative private credit market. the unit formalizes an existing operation that has offered loans since 2019. it has created more than 50 direct lending deals in the u.s.. >> we've been talking all things cba this week after earnings released but they are really now the world's least loved mega bank after they lost their last remaining bulls. it's interesting because now we see jeffries on the bullish side standing downgrading it to hold after

the rbnz delivering its biggest interest rate increase in 22 years with that massive move to 1.5%.ve seen the kiwi dollar pairing those gains that we saw her earlier. the aussie trading the highest since 2020 against the kiwi. that's been driven by expectations that are being reined in and the market as to how much further and quicker's rbnz can move from here. shery: we will be watching those moves. let's turn to the geopolitical tensions still ongoing. the u.s. set to expand the size and scope of weapons it's providing to ukraine in a new $800 million package of military assistance. let's get the details from jodi schneider. what is the significance of this renewed aid? jody: it's a big package. new firepower for ukraine from the u.s.. president biden announced it today after talking to the ukrainian president on an hour long phone call. he basically outlined it. it includes new helicopters, ammunition, artillery, and other military hardware. it's a more intense military package than the mostly defensive kinds of weaponry that the u.s. had set ukraine before. it pushes the limits

one of the reasons why, the rbnz momentum to raise rates.ave to see where the economies on the other side of this delta outbreak that new zealand is seeing. it is still in lockdown. it is number -- an important part of new zealand's economy. that lockdown continuing. it's going to continue to cs reverse course on gdp in the third quarter. in my view, is likely the rbnz holds fire again in october. we have to see how the virus fares. shery: james mcintyre there. let's turn to north korea there. it conducted its second major missile tests in less than a week. pyongyang is pressing ahead with its armed buildup. the biden administration's diplomacy stalls. the leading presidential candidate told bloomberg exclusively that he thinks the u.s. approach is naive. >> [speaking non-english language] >> wins dies -- wednesdays missile launches nothing new. what is important to me is the fact that north korea has reached the completion stage of its submarine launched program. this means the collapse of the u.s. nuclear defense network. the u.s. is prepa

the rbnz at decision is later this week.ed to raise rates by 25 basis points, as commodity prices rise, adding further to inflationary risks as well as elevated energy prices. just really expected to cement the rbnz's conviction that further tightening is needed to prevent market pressure from morphing into a wage price spiral. also likely to see signaling of more rapid tightening. this is what we are seeing what it comes to the australian three and 10 year. the aussie dollar opening .2% softer after the may 21 election was called. shery: the 10 year yield in australian topping 3% for the first time since july, 2015. quite something when it comes to that jill -- that global bond rout. china defending its covid zero strategy as america asks americans to avoid traveling to china after what washington because the arbitrary enforcement of rules. let's bring in stephen engle. what is the latest on the shanghai lockdown? stephen: despite the fact that of course they have been in lockdown now since march 28, we're seeing a record n

there was no change when it came to the cash rate on the rbnz, but the comments on the kiwi dollar'sion put pressure on the currency. >> it appears there could be more easing coming down the pipe. came inexport numbers line with expectations. new zealand posting a relatively healthy trade surplus for the month of may, $1.25 billion but the rba expressing concern for the impact the currency may have on exports, signaling policy tools are under active discussion. those remarks appeared to have the desired effect. the kiwi dollar, easing a little, about 64.1 at the moment. in terms of those extra measures, the cash rate wedged at an historic low, it could ramp up when august rolls around and that would be especially considering there is more issuance coming from the government area there could be more pain coming down the pipe. the first quarter gdp numbers were worse than expected at 1.6 percent contraction, but the second quarter will make that look like a picnic. the second quarter covers the period of harshest lockdown in new zealand. shery: new zealand has done well when it comes t

kathleen: another thing i asked minister robertson about was the possibility of raising taxes and the rbnzing that is the way to go. he said they will minimize borrowing and everything before raising taxes. he mentioned this coming soon, may 18, when the budget is coming out, and they have taken a look at their spending and taken some things out of the budget already like a social spending program, so they are starting to make room for this cause without having to increase borrowing or raise taxes. the other biggest challenge for the year or the biggest risk to the outlook is global economic uncertainty, and that is a major factor in theme from many countries and certainly at these imf world bank readings here in washington. haidi: kathleen hays there. well, the strongest cyclone to hit western australia has made landfall, impacting operations in the key commodity producing region let's get the latest in melbourne, australia. we have been talking about the cost of reconstruction and recovery. what is the latest when it comes to it? >> overnight, finally it did cross the coast of western au

goes more likely the rbnz and if the rba goes, the rbnz well. shery: thank you for that. there will be policy decisions from southeast asian central banks. let's go to sophie. any rate cut contenders this week? sophie: central banks will try to decide on policy this week, malaysia and the philippines could be candidates for rate cuts given the policy room in light of the fed's stance. they could hold with thailand which is staying unchanged in the first half, even as the boj governors- the bot said -- did take ahe bot cautious take. they had the slowest expansion for the economy in three years, cutting the forecast to 3.8% as well as lowering inflation. trimmed its forecast for gdp growth forecast in march lower than the government's rejection of 4.9% for the year. 25 basis point cut from malaysia which would reverse last year's hike when it comes to back -- comes to inflation's, they are below growth, forcing a case and also a rate cut at this week's decision or later in the year. there is upside risk with lebron trend higher with oil prices even with the drop in wti. th

why so much uncertainty this time around about which way the rbnz will go?eas you majority of economists do expected cut today but the markets seem to be pricing a much lower probability of that now. i think there are broadly two schools of thought. one is having adopted an exquisite easing bias in march, the governor will get on with the job and cut rates. data recently on the domestic side has been weaker than expected. in a sense, he has been delivered the conditions he's needs -- he needs to go ahead and cut. on the other hand, the economy is in pretty good shape. growth has slowed but still above 2%. some people are saying there is no real urgency. the central bank can afford to sit on its hands and see how things pan out. that is exactly what we saw the reserve bank of australia do yesterday. shery: you spoke to the governor himself last month. what were the biggest takeaways from that conversation? think it was, i for everyone really. governor orr certainly confirmed a rate cut may be a possibility. we know we are dealing with a live decision today. a

rbnz releasing details of the unwinding of kiwi bond purchases.es start in july at a rate of five billion kiwi dollars per fiscal year and continue until on holdings reaches zero in mid-2027. we're seeing the 10 years -- 10-year new zealand higher. also watching comments from the treasury secretary saying it could go well above 6% and could stay there. woodside energy also tripping surging oil and gas prices to years of insufficient investment in the energy industry. the ceo said she expects prices to remain high but long-term investment will help the price outlook. shery: looking at the commodities space, we're seeing wti continuing its gain, up .2% above the $122 a barrel. it is a relentless rise, and this really fueling inflation concerns. data here in the u.s. showing the inventories have dropped again. we continue to see u.s. natural gas under pressure, this of course after that fire broke out at that texas export terminal. the fire is said to be under control at the moment. one of seven to export u.s. natural gas via sea. we're seeing gasoli

turning to new zealand, the latest rbnz preview. chief economist saying economy has moved quickly from resilience to frothiness given the data we have seen in inflation and jobs. she expects a 25 basis point rate hike next week. she is not ruling out 50 basis points. she does expect the rbnz will stick to a measured approach. haidi: we are taking a look at the luxury sector. a french luxury brand is taking another step in reducing its carbon footprint by revamping a signature tag in recycled material. >> we were doing sustainability before we knew the word existed. we are manufacturers. the fact that we are in contact with products, with the making of the products gives our company a very different character as opposed to many other fashion brands who do not manufacture anything. it comes naturally to us we need to protect the environment that provides the resources we use. we are taking a little bit more of a formal approach. we are developing a project that is pushing the envelope even further. like our project we are just launchi

we saw the biggest rate hike in about 22 years from the rbnz.we have had more hawkish and aggressive language from governor adrian or about the pace of monetary tightening, and they expect to keep raising rates in the coming quarters to contain inflation expectations. 1.8% quarter on quarter, slightly lower than expectations of 2% but faster than the 1.4% that was the previous quarter. the year-on-year number, 6.5% is the inflation rating for cpi. missing expectations a little. we were looking at expectations of 7.1%, but picking up the pace from the 5.9%. as such, inflation rate at 6.9%, the fastest in 32 years for new zealand. shery: a little more on the fallout from bill akron's call on netflix. they have lost more than $343 million under three-month bet. we have learned pershing square holdings sold their netflix investment today. they purchased more than 3 million shares just in january, but we are now learning to have lost more than $430 million on that three-month netflix bet. their loss on investment cut was year-to-date returns by four